Twitter loses another bullish analyst, as KeyBanc’s Patterson says Musk’s bid could ‘go up in smoke’

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Twitter Inc. TWTR, -1.68% lost another bull, after KeyBanc Capital analyst Justin Patterson downgraded the social media company in the wake of Elon Musk’s buyout proposal. Patterson cut his rating to sector weight, after being at overweight since January 2021, saying that the potential for the Musk bid to “go up in smoke” will turn investor focus on a more challenging macro environment that elevates downside risk to financial estimates. The stock had initially rallied Thursday after Musk, Tesla Inc.’s TSLA, -3.66% chief executive, disclosed a $54.20-per-share buyout bid, but pulled an intraday U-turn to close down 1.7%, and 16.8% below the bid price, as skepticism about a deal increased. Patterson believes Twitter will reject the bid, which puts the company in a “difficult” situation. “Rejecting the offer risks losing Mr. Musk as a shareholder and potentially receiving more criticism of the product at a time in which the macro environment elevates risk to ad models.” With Patterson’s downgrade, only eight of the 38 analysts surveyed by FactSet are bullish. Twitter’s stock has tumbled 37.1% over the past 12 months, while the S&P 500 SPX, -1.21% has gained 5.3%.

This article was originally published by Marketwatch.com. Read the original article here.

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